A Consequence of Increasing Marginal Costs of Producing Digital Music

question 153

Multiple Choice

A consequence of increasing marginal costs of producing digital music players in Japan is

• A)Japan will not export digital music players.
• B)Japan will stop short of complete specialization in the production of digital music players.
• C)Japan will import digital music players from countries that don't experience increasing marginal costs.
• D)Japan will likely impose trade restrictions on imported digital music players.

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Definitions:

Profits

The financial gain received by a business after subtracting the total costs from the total revenues generated through its operations.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price.

Marginal Cost

The additional cost of producing one more unit of a product or service.

Profit-Maximizing

A strategy or approach aimed at achieving the highest possible profit from business operations.